Calhouns Can(n)ons

Look! There's a lawyer in my soup!

For folks who have been as puzzled as I have been about the various lawsuits being settled here in Sewerville (We put the sue in Sewer!), the following was an email from Julie Hayward Biggs of Burke, Williams & Sorensen describing some of the cases recently settled and the rationale for settling them.

As interim-attorney for the CSD, Mr. McClendon already explained at a recent CSD meeting, the principle of prudence, probabilities and the idea of "first of all, do no harm" also applies to law as well as medicine. Clearly, the Hideous Los Osos Sewer Project has been plagued with lawsuits. And those will continue to happen. Indeed, if I'm not mistaken, former board members Hensley and Gustafson's group have filed another suit against Measure B, which the CSD will be required by law to defend. (Their first suit was tossed out because the judge ruled that they had no standing at the time.)

At a CSD meeting some time ago, one wag noted, "Lawsuits are a way of saying, 'You have a bad project.'" Alas, I suspect he's right. Lawsuits can be frivolous, or they can be a way of saying, "Bridge out. Slow to 60." Elected Boards (and just plain folks) who sue and/or are sued, are faced with the sometimes difficult task of discerning one from the other.

And ignoring the serious warning bells signaled by a lawsuit is done at a community's peril. As example, I give you poor Los Osos and its Sewer Train Wreck caused when the recalled CSD board majority didn't stop and get the questions about the "missing" Proposition 218 matter settled before pounding gazillions of dollars of state loans into the ground.

And for those who are complaining about legal costs, they should keep in mind that even if the recall and Measure B had failed, all of the cases recently settled would have been alive and well and if they had prevailed, would have cost the (previous) CSD waaaaay more money in the long run.

Like betting on the ponies, legal decisions often come down to a matter of weighing the odds. More important, like playing the ponies, anyone thinking about suing had better seriously consider whether or not they can afford to lose -- big time. Hence, mediation and settlement are almost always the most prudent course of action. As good old Dr. Phil says to warring spouses: You can be right or you can be happy. Take your pick.

In law, as in life, Pyrrhic Victories abound.

A.C.

December 14, 2005
VIA EMAIL TRANSMISSION
Ann Calhoun
Los Osos, California

Re: Payment of Legal Fees
Dear Ann:

In light of the various comments and concerns expressed by some members of the Los Osos community, we thought maybe some further information regarding the payment of legal fees to our firm would be helpful.

As you know, we represented CASE and CCLO on a pro bono basis starting in February of this year. We initially offered to assist in the preparation of an initiative measure and our involvement grew from there.

Both CASE and CCLO received free legal services as we worked to stop construction of the sewer at the Tri-W site. In addition to preparing Measure B, our efforts included picking up a lawsuit that another law firm had filed. The other law firm abandoned the client just prior to a major hearing and refused to pursue the matter unless legal fees to that point were paid in full. We had about a week to jump in and keep the action live, with no assurance that we would ever get paid.

That case became the 4/5 vote challenge that delayed the award of bids and the notice to proceed until July. The case was live and subject to appeal until settled. Had the board not settled we would have pursued that action on appeal and incurred more fees on our side. The CSD would also have incurred more fees to defend against such an appeal.

We also filed a CEQA action relating to the staging sites that had never been reviewed in the original EIR. That case was live and proceeding prior to settlement. In August we filed an action in Sacramento in an attempt to prevent disbursement of SRF funds. While that action failed to accomplish that goal, the underlying action for waste of public funds was entirely viable and active prior to settlement. Finally, we also picked up another case from prior attorneys relating to illegal dumping by the CSD. That case was in the early stages of discovery and would have led to substantial legal fees had it not been settled. All of those cases would have led to substantial additional costs together with significant risk of loss if they had not been settled.

Then of course, there was the Measure B case in which the CSD filed an action to keep the initiative off the ballot. We won that one outright. While the ruling at the local court was before the Court of Appeal for hearing, the only matter open in that case was an order for the lower court judge to show why the ruling should not be overturned. The judge had declined to appear in the matter and the election had already been held. We had clearly won and were entitled to fees under the law.

It is important to note that even if Measure B had been defeated at the polls, we still won the case and were entitled to fees.

By any standard, we provided substantial and beneficial legal services to our clients CASE and CCLO at no cost to them, and in doing so, we protected fundamental rights of the people.

Pro bono litigation is only "free" to the client. It is always undertaken with the understanding that if the litigation is successful - as it was for CASE and CCLO - the attorney will seek fees from the other side. In fact, the law encourages attorneys to step up in situations like Los Osos to assist the people in situations like this by providing a means for the attorneys to be paid.

We understand that Mr. Margetson, for example, was provided pro bono legal services by The First Amendment Coalition on a referral from us when he was sued by then Directors Gustafson and LeGros. His lawyers now are seeking, and almost certainly will be awarded nearly $20,000 in fees for the short term work they did for him. It was "free" to him, but it won't be free to his adversaries.

In CASE and CCLO's lawsuits, the adversary was the CSD and the CSD is therefore responsible for payment of fees.

The law provides for legal fees to be awarded in cases brought by individuals and groups who attempt to vindicate public rights. The public policy here is to encourage lawyers to take on cases that address public issues. In settlement negotiations, we agreed to limit our fees to reduced rates that we ordinarily charge only public agency clients in order to settle these cases quickly. We wanted to get this stuff behind us so we could be part of the solution to the problems in Los Osos.

In real dollar terms, we could have charged between $350 and $500 per hour instead of the $200-225 that we settled for. In addition, we would have been entitled to a multiplier of 1.5 to 2.0 on the Measure B suit and potentially on the remaining cases. That means that instead of fees amounting to $500,000, we reasonably could have demanded something around $750,000 to $1,500,000 or more.

The CSD spent more than $600,000 to defend these actions as reported by the previous Board. The Board would have had to incur substantial additional fees to fight the actions that remained outstanding after the election had the cases not settled. A quick settlement ended the risk and stopped the bleeding.

In addition to limiting our fees to only our public agency rates and foregoing any multiplier, we have agreed to accept payment over 12 months, interest free. That fact has been omitted from news coverage of this matter.

Finally, the entire drafting of Measure B was done at no cost and \was not incuded in the lawsuit fees. We spent abouit 75 hours or so on that project alone and have written off the entire fee for those services which amounted to about $20,000. We were also directed by our clients to assist the CSD in anyway possible after the election to assure the relocation of the wastewater facility. We did so after our settlement billing cut-off date of November 15, 2005, and prior to being retained by the CSD on November 23, 2005, on the four outstanding cases. That effort amounted to about an additional $16,000 in fees that will never be collected.

We took on this challenge because we believed it was the right thing to do. We carried all expenses of the legal challenges for close to a year with no reimbursement. We are carrying the bulk of the settlement interest free for the next twelve months. We are continuing to provide 24 hour legal services to the CSD in the face of serious doubt that the CSD will have the funds to pay us in the future. We are committed to seeing this issue through and getting Los Osos on track.

One last thought. We took on this challenge knowing that unless we were successful, we would get nothing. That was a serious risk.

We agreed to take that risk because we believed in the righteousness of the cause and we recognized that the people of Los Osos needed our help. We stepped up when no one else would and when others had abandoned the community. We gave Los Osos our full and unlimited effort, trusting in ourselves and the people of Los Osos to succeed.

But for our involvement and the legal challenges we mounted, construction at the Tri-W site would have begun in April and there would be no turning back now.

I think we know what "pro bono" means.

Very truly yours,
BURKE, WILLIAMS & SORENSEN, LLP
Julie Hayward Biggs